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18 AFLOAT.com.au July 2017
In 1945, as World War Two closed, the
Australian trading fleet comprised 180
ships carrying cargo and passengers
across the world and around Australia’s
coasts. These ships were crewed in the
main by Australian merchant seafarers.
The Australian merchant navy made a
profound contribution to Australia’s war
effort. The Seaman’s Union of Australia
recorded an 8.5% fatality rate for merchant
seafarers; this exceeded that of Australia’s
army, navy and air force.
Since that time the number of
Australian ships and merchant seafarers
has been in continual decline. Some of
that can be attributed to the end of the
war. Most of it cannot. The trend is historic
but has accelerated of late. The number
of Australian flagged ships engaged in
domestic trade on Australia’s coasts is
now 12. Table 1 illustrates the progressive
decline from 1962 to the present.
Australia’s international trade has
historically been dominated by foreign
shipping and that continues to be
the case: 99% of international trade
to and from Australia is carried by
foreign ships. Without the movement
of goods and materials in and out of
the country, Australia stops. Much of
this article concerns domestic trade; it
should be noted however that Australia’s
international trade dwarves its domestic
trade, at a ratio of about 28:1.
Trading nations have generally
considered it necessary to build up and
protect domestic merchant fleets. One
way of doing this is cabotage. Cabotage
means, literally, coasting trade, and is
derived from the French word caboter, i.e. to
travel by the coast. The term as used today
describes the rules used by nation states
to restrict the carrying of cargoes between
domestic ports. It also used to refer to the
restrictions that apply to foreign airlines
running domestic air routes.
Any number of countries, including
Australia, have cabotage rules. The object
of cabotage rules is to protect domestic
industry and enforce relevant standards. It
would be pretty odd if a foreign registered
truck paying third world wages could
ply its trade on Australia’s highways (it
would also destroy the competitiveness
of Australian trucking companies). Similar
reasoning applies to explain why controls
are imposed on the carriage of domestic
cargo in sea space. As things stand, and
because foreign ships can carry domestic
cargo around our coasts, the position is
not dissimilar to the truck example above.
The range and severity of restrictions
varies. Putting it mildly, Australia is at
the more tolerant end of the spectrum.
The United States, for example, imposes
very severe restrictions: in the United
States no ship can carry cargo between
domestic ports unless it is a US registered
ship built in the US, owned and crewed by
US nationals.
There are clear strategic justifications
for the maintenance of strong nationally
flagged merchan t fleet. If Australia – an
island nation with considerable offshore
wealth* – is to be able to move cargo
around its coasts in times of war, it must
have the ships to do that. As things stand
DECLINE AND FALL?
The state of Australian shipping
Australian flagged shipping is in decline. Most of the cargo being
carried around our coasts and to and from Australia is carried on
foreign flagged ships. Recent attempts to change that have failed.
In this article, Chris Kelly asks how and why that has happened.
Alam Suria entering Fremantle in 2015. This ship is registered in Panama.
PhotoBahnfriend
* Australia has the 5th largest EEZ (exclusive economic zone)
of all of the coastal states. The EEZ is the 200 nautical mile
offshore area within which, generally speaking, a state can
exclusively exploit ocean and seabed resources.